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Do You Want To Buy a Home in 2015?

With
uncertainty over mortgage rates growing and new Fannie- and Freddie-backed
programs rolling out next year, those seeking to buy a home will continue to
contend with changing standards. If you're planning to become a homeowner, take
these steps before borrowing.

1.
Get preapproved. Stay ahead of the game by actually getting preapproved
for a loan – not by getting an estimate from a lender. Not sure if you've been
officially preapproved? Take note of what your mortgage professional does – if
your credit report was submitted to an underwriter, you’re in good shape.

3.
Avoid moving funds. To mitigate your financial liability, put off moving
funds until after you’ve closed on the home. That means no cashing out on
investments, retirement accounts or CDs. Additionally, don’t use your savings
to pay off debt or fund a CD – this can be a red flag to lenders.

4.
Get your down payment gift early. If family is helping you with a down
payment, have them deposit the money in your account more than two months prior
to applying for a loan. You’ll avoid hassle with the banks trying to track down
the source of the funds.

5.
Create a PDF of all documents. Round up all documents related to your
finances: bank statements for checking, savings and investment accounts, pay
stubs, W-2s, tax returns and canceled rent checks. Compile these into one PDF
for your lender’s convenience.

6.
Be prepared to write letters. Lenders will want to know details about
every potentially harmful financial scenario before approving your loan. If
there are any discrepancies in your financial history, such as frequent moves
in a short amount of time or a substantial monetary gift, be prepared to
explain these situations thoroughly in a letter.

7.
Cut costs on mortgage insurance. The new Fannie Mae and Freddie Mac mortgage
programs require as little as three percent for a down payment – but insurance
premiums through the FHA will come at a higher cost. Opt for private mortgage
insurers, which generally have cheaper premiums.

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